This invention relates to electronic transaction cards. More particularly, it relates to electronic transaction cards which utilize at least two conventional magnetic stripes and which may also be used in various applications such as credit, debit, cash, and borrowing, as well as, information storage, single and co-branding programs, awards points, loyalty programs, affinity programs, personal identification, licenses, and electronic keys.
In the past as well as the present, credit, debit, and other magnetic stripe cards, have used only one magnetic stripe. Although unchanged for decades, these designs did provide an acceptable level of performance in line with traditional business practices. Current business environments, however, have now evolved to such a high degree of diversity and competition that many people regularly carry large numbers of these cards with them. Unfortunately, this has lead to a situation with many problems, most of which can be directly attributed to the inherent design inadequacies of these single stripe cards. For instance, the soliciting, issuance, delivering, confirmation, monitoring, and billing of such a large number of cards is very expensive and environmentally wasteful. Moreover, as the quantity of cards increases so does the possibility of loss and theft. Add to this, the needless cluttering of consumer wallets and the increased environmental waste caused by prodigious quantities of discarded and expired cards, it becomes quite clear, that these various design weaknesses are innate.
Therefore, in order to alleviate these problems and others a number of business groups developed what are now called, smart cards. Although much more expensive than traditional single stripe cards, smart cards could, by virtue of the electronic chips embedded within them, simultaneously replace many of these other cards. They could also greatly expand individual card capabilities as well as increase their functionality. Thus, in spite of their exorbitant price, general market acceptance seemed assured as demand began to grow. However, two major barriers inevitably impeded these initial successes. The first of these was high cost. The second, but more important, was the realization that almost all of the equipment currently used by financial institutions, retailers, vendors, and others was magnetic stripe based.
Consequently, the only way that smart card advocates could overcome such limitations would be to persuade existing businesses to upgrade their operations. Such an undertaking, however, will no doubt prove to be both arduous and expensive because it will require the upgrading of all central mainframe computers, the retrofitting of millions of point of sale units, the purchasing of new support equipment, the training of personnel, and the ongoing maintenance and upkeep of two independent transaction systems. As a result, these companies have, for the most part, delayed or deferred any major market introduction within their North American operations.
In an effort to resolve these new problems, some smart card manufactures have now incorporated a single magnetic stripe into their new card designs. The reasoning was that by possessing both an electronic chip and a magnetic stripe all problems could now be overcome. However, while the theory was good the reality was not. That was because this remedy did not effectively overcome many of the previous failings. For example, by utilizing such a design combination the already high fabrication cost of smart cards was made costlier still. Secondly, should the security features of smart cards ever be defeated by criminals or other non-authorized users the ramifications would be most severe. That is because it would allow such people unfettered access to information much more sensitive than that found in any contemporary magnetic stripe. Lastly, and most importantly, the ongoing operational expenses of a hybrid card system is both costly and burdensome, because it would require financial institutions and vendors alike, to keep two individually unique technological systems operational, where only one existed before.
With these thoughts in mind, it becomes increasingly clear that a number of pressing needs remain unfulfilled in this area of business. To this end, the invention disclosed herein addresses these deficiencies by providing a more effective solution for an optimal overall performance and business model.